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雷达卡
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Industry news: 1) Chinese Vice premier Mr. Li Keqiang reiterated the
need to continue property tightening measures given resilient property
prices in the past few months. All state banks officially denied media
speculation that CBRC ordered state-controlled banks to stop real estate
developer loans. 2) Banks' disclosed data suggests minimum impact
from new trust loan regulation given likely amount to be taken back to
B/S will only account for nearly 0.7% of total 11E loans and 0.6% of
11E RWA. 3) Demand for fiscal deposit increased as some banks
compete for more deposits to maintain L/D within 75%. 4) PBOC
second payment system was officially launched on Aug 30 to fulfill
online transfer across banks.
• Company news: 1) Big state-controlled banks ICBC, BOC and ABC
posted strong YoY earning growth of 27%, 27% and 40% respectively,
and improving asset quality, which either exceeded or matched market
estimates. Banks managements are confident about positive outlook for
2H10. 2) SPDB received approval from CSRC for Rmb40bn private
placement to China Mobile. The bank also reported 34%y/y net profit
growth over the weekend, largely driven by 10bps NIM expansion q/q
and robust fee growth.
• Open market operation: Due to lesser bill maturity of Rmb60bn compared
with Rmb166bn in previous week, OMO in the week of Aug 28 ended up
net liquidity drain of Rmb91bn. Seven-day repo rate edged up by nearly
10bps in view of Rmb25bn ICBC convertible bond in next week and other
bond issuance in pipeline. In the short term, market rates would continue
trading in narrow ranges given the concerns on high August CPI, further
liquidity tightening on property market and large supply of bond issuance.
• Share price performance: Chinese banks slightly contracted last week due
to the overall continued weak market sentiment and speculation that CBRC
requested big banks to stop property development lending. H-share banks
were largely down by 1%-3%, except ICBC (+2.3%) and CCB (+0.5%)
which ended in positive territory on the back of strong 1H10 earnings, along
with CMB (+0.6%). ABC and Citic outperformed peers in A share market to
gain 0.7% w/w each.
• Valuation: On average H-share banks are trading at 9.7x 10E earning and
1.9x 10E PB. The H-share trading premium to A share has been narrowed
slightly to 11% vs. 13% in past weeks. In short-term, we expect stronger
share price momentum in ICBC, as well as some medium-sized banks such
as Citic-H. In A-share market, investors may continue to focus on selected
medium-sized banks like CMB-A, Minsheng-A and SPDB, even though
bigger state-banks like BoComm-A, ICBC-A and CCB-A are more
attractive in the 12-18 month time frame in our view.
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